Economic downturns require extraordinary leadership. They require brutal honesty. They require action. If your market and company are truly in trouble, here are some turnaround strategies (learned the hard way) to weather the storm so you can live to fight another day.

1. There Is No Such Thing As One Bad Quarter

When your markets get weak and/or you really screw up, fixing it will take a lot longer than you think it will. Pray for spring, but get ready for a long, cold winter.

2. Get The Facts Yourself

People don't like to deliver bad news. As an executive, your job is to get to the heart of the problem fast. You (not someone who works for you) need to figure out how bad your problem is.

How bad is the sales forecast? How late is the next release of the product? What is the cash burn rate? How many critical projects are broken? You must drill into the "whys" to make sure you understand the facts and the causes of the problems. The key is to ask "why?" five times.

Why is the project late (you will get an answer)? Then ask why that is the case (you will get another answer), then ask why that is the case (you will get yet a deeper answer), and so on.

Once you've asked why five times, end every conversation with the most powerful question you can ask, "Is there anything else?" Before my grandmother was heading into surgery to fix a broken hip, I asked her doctor that question. He told me something he had not wanted to tell us--that there was a 25 percent chance she would die during the operation. People don't like to deliver bad news. Real leaders get the real facts so they can take real action.

3. Get 2 Top 10 Lists Fast

Get the smartest, most courageous people in the company together this weekend (no more than 10 as big groups do stupid things) to brainstorm about the top 10 ways to drive revenue and the top 10 ways to cut costs. Here are a few ideas to get you started.

Drive revenue:

Assign every big deal in the pipeline to an executive and make the execs and the salespeople accountable for closing the deals

Give customers a new incentive to buy this quarter

Focus on your core markets and ignore the rest

Announce a competitive replacement program (provide an incentive for customers of your competition to switch)

Cut cost:

Do a lay-off

Pull out of under-performing markets or geographies

Sell under-performing assets or business units

Stop all stupid travel, off-sites and trade shows (anyone at AIG from there?)

4. Horde Cash

In March of 2000 as the tech bubble was getting ready to burst, my accountant, the legendary Greg Finely, called me and yelled, "Horde cash!" It's good advice in bad times. Meet with your CFO and finance team to figure out how to optimize the cash, and never forget the sage words of the Coen brothers, "Where's the money, Lebowski?"

5. Tear Off The Band-Aid Once

Take all the pain in one big shot. Cut deeper and make bigger changes than you think you need to. The more quarterly forecasts you miss and layoffs you do, the harder it is to recover. Once you know that your company is in trouble, assume it's in worse shape than you realize. Because it is.

If you are going to miss quarterly numbers and forecasts, miss them once. If you have to do a reorg, do it once. And if you are forced to do a layoff, do it once.

6. Fire Executives

It is stunning how many companies do a layoff without firing any executives. You can't layoff 20 percent of the company without letting go of some of the executives (who are at least partially responsible, if not completely responsible for the problem). And don't just demote them, or move them to some other job. Fire them.

7. Chop The Dead Wood

Every company has people on the team who are "C" players. Rather than doing an across-the-board 10 percent cut, make sure that the people you are cutting are the worst performers in your company. Your "A" and "B" players will appreciate the fact that you did the right cutting. This may sound harsh, but no one wants the "C" players around anyway.

8. Tell The Truth

Some executives think that lying, misleading, and otherwise obfuscating will "soften" the blow in bad times. Wrong. Lying never works. It sounds obvious, but companies and executives do it all the time. It can land you in jail or ruin your career (trust me--I've seen this happen to well-meaning but misguided execs). People hate delivering bad news, so they tell a "white lie," which they often rationalize as somehow doing good for others.

Be honest and direct about the facts. Brutally honest. Be honest with your stakeholders. If you are laying off 25 percent of your people, then say that's what you are doing. Don't say, "We are laying off 15 percent and expect some additional headcount reductions through normal attrition."

9. Communicate Clearly and Powerfully

The truth will never be as bad as the rumors will become. "No comment" will increase the untruths and gossip. It will also unleash the venom of the people you used to be forthright with. The press will attack harder, and your employees' distrust will grow deeper. Both will undermine your efforts with customers and drive your stock price even further down. It doesn't matter how much it hurts. You must over-communicate.

When you're in trouble, get clear about what you are going to say before you open your mouth. Rambling or trying to make 16 points will make you look confused, defensive, or stupid. Then get clear on three--and only three-- key messages to deliver: the facts as you know them, the actions you're taking now, and how your actions today position you for future success. Write these messages down, and practice saying them.

10. Sign A Pact In Blood

In November of 2005 Mercury's board of directors fired our CEO, CFO, and general counsel because of a stock-option accounting problem. Our stock tanked, our competitors attacked, and our employees were scared. The key executives in the company agreed to stick together come hell or high water (and boy, did we go through hell and high water, but that's another story).

We didn't wavier. And neither should you. Nine months later, we had settled the accounting problem, turned the company around, produced some of our best quarters ever, did an acquisition, and ultimately Hewlett-Packard bought us for a significant premium. That turned out to be a big win for shareholders, customers, our people and HP.

11. Drive It Like You Stole It

Legendary teams execute their turnaround plans like it is the last thing they will ever do. Take action. Bust your butt. Get on planes and meet with all of you key customers. Rally your teams in town hall meetings in all of your key offices. Refine your strategy. Focus your efforts. Get your people focused on results. Meet with your top investors to tell them how and why your turn around will work. Get help from some wicked advisers. Recruit new talent to the company. Sell, sell, sell, and lead, lead, lead.

Leading a company through a turnaround is arguably the hardest thing to do in business. If you actually do it and pull through, it will become the most rewarding thing you have ever done in business. Good luck and knock 'em alive.

After 20 years in business and being the marketing chief at three public companies, Christopher Lochhead retired at 38. Now, he serves on a few boards and is a part-time strategy adviser. Every year he gives a handful of speeches, and from time to time writes something. Check out www.lochhead.com.